Four years ago, the Texas Legislature took small steps in a Texas beer-brewing renaissance by lifting onerous regulations on small manufacturers and brewpubs. Texas’ craft beer industry has undoubtedly helped the State’s economy bring in billions of dollars since, and continues to be a burgeoning industry. However, lawmakers and lobbyists alike have taken notice in those four short years. 2017’s House Bill 3287, which Gov. Greg Abbott didn’t veto, will now force many craft breweries to pay a distributor to deliver their beer — even if they’re selling it to on-site taproom guests where their beer is produced. Really, these distributors aren’t delivering the beer at all, and are pocketing hard working craft breweries cash without lifting a finger.
“It is absurd over-regulation that will slow the growth of the craft beer industry in Texas and drive capital investment in breweries to other states,” the Texas Craft Brewers Guild said in a statement after the law’s passage. Distributors now collect a fee for any beer sold in a brewery’s own taproom, even thought that beer never leaves the brewery.
According to figures compiled by Texans for Public Justice, a watchdog group that tracks the influence of money in state politics, boozy distribution interests gave more than $11 million to state campaigns over the past four years.
A single donor, Houston beer distributor John Nau, gave $2.4 million. Nau’s company, Silver Eagle Distributors, is the nation’s largest distributor of Anheuser-Busch products. He also happens to be Abbott’s campaign treasurer. Abbott was by far the largest recipient of beer distributor cash for the four-year period ($1.4 million), followed by the two Republicans who set the agenda in the Texas Senate and House (which passed the pro-distributor bill) — Lt. Gov. Dan Patrick ($688,000) and House Speaker Joe Straus, ($508,000).
Making the situation more difficult on Texas craft brewers is a statewide hiring freeze issued by Texas Governor Greg Abbott, which has been affecting virtually hundreds of state agency jobs. It’s been said that attempting to save the state millions of dollars is actually costing multiple businesses quite a bit of money as a result.
Back when the statewide hiring freeze was initially announced in January, which is expected to run through August 31st, Governor Abbott stated that he hoped that it would save approximately $200 million, as he had anticipated that there would be a budget shortfall.
One agency particularly burdened by this hiring freeze is the Texas Alcoholic Beverage Commission (TABC), a State agency already troubled with controversy, including lavish trips officials took to out-of-state resorts, questionable use of peace officer status by agency brass, and failures to accurately maintain records of state-owned vehicles. More recently, TABC attempted to cancel all 164 permits for Spec’s liquor stores or fine them up to $713 million. A panel of judges, in a stinging legal rebuke, said the agency failed to prove any serious infractions and recommended no financial penalties be levied against the liquor store chain.
Aside from the controversy surrounding TABC’s upper brass exodus, including the agency’s general counsel, chief of enforcement and head of internal affairs, approximately 20 positions in TABC have been affected by Governor Abbott’s statewide hiring freeze. One of those positions is a beer and wine label approver. Even though there currently is another person performing that task, that’s an individual who also has multiple other duties that they are required to perform as well, according to a TABC spokesman.
If labels do not get approved on time, it will result in production getting greatly slowed down, which can affect when products get put onto shelves. The TABC also says that lately, they have been dealing with quite a bit of high demand in the sense that there are quite a few people in Texas who really want to make beer. As a result, they have filed four waivers with Governor Abbott’s office. All four currently remain pending. The only position filled by Governor Abbot is that of executive director, now served by practicing lawyer Adrian Nettles, after interim director, Ed Swedberg, abruptly quit July 7th, saying he did not want to participate in the termination of another high-ranking official at TABC.
This is a different type of fight when it comes to alcohol and the law. If you happened to stumble upon this story while searching for an affordable DWI attorney in Austin make sure to give us a call immediately.